Market Vectors® Agribusiness ETF

The world has a problem that’s actually good for the fertilizer industry. This is the world’s population, which is ever-growing, as is food consumption.

In the second quarter of fiscal 2019, Deere (DE) reported total revenue of $10.27 billion from its equipment operations.

While Mosaic’s target price increased in November, analysts’ recommendations remained unchanged month-over-month.

The agribusiness sector has largely remained weak in 2018. The agribusiness sector gave up its gains last week.

In the fourth quarter, Deere (DE) reported total revenues of $9.42 billion, which included financial services and other revenues.

Last week, the Fertilizer Affordability Index, which is issued by Mosaic, declined to 0.83x from 0.85x a week ago.

In the Cornbelt region of the US, the potash prices rose by 31 basis points to $289 per metric ton from $288 per metric ton.

In the week ending November 2, urea prices continued to drop—a continuation of the trend we observed in the past few weeks.

The week ending November 2 was broadly positive for the agribusiness sector. The VanEck Vectors Agribusiness ETF (MOO) rose ~4.5%.

On October 31, CF Industries (CF) reported its third-quarter earnings. The company reported revenue growth of 19.5% YoY to $1.04 billion.

Natural gas prices for the week ending October 26 increased week-over-week at most locations in the US.

Last week, the overall agribusiness sector was broadly negative. The VanEck Vectors Agribusiness ETF (MOO) fell ~4.9%.

Last week, the MAP prices in the NOLA (New Orleans) region of the US were flat week-over-week at $430 per metric ton.

In the week ending October 19, urea prices in the NOLA region of the US and in Brazil paused after a meteoric rise since the beginning of April.

Last week, Intrepid Potash rose 5.9% to $3.6. Nutrien (NTR) gained 3.3% to $55.8, while Israel Chemicals (ICL) gained 1.6% to $6.2 per share.

Last week, which ended October 12, fertilizer affordability was unchanged week-over-week.

Last week, granular potash prices in NOLA (New Orleans) rose 2.6% to $251 per metric ton, from $245 in the week ended October 5.

Last week, global tensions remained high, and natural gas prices spiked as the overall stock market traded in the deep red.

Last week, MAP (monoammonium phosphate) prices were flat in the Brazil and NOLA (New Orleans) regions.

Natural gas prices are a key price driver for urea and other nitrogen fertilizers.

On October 2, CF Industries (CF) received a target price upgrade from UBS. The stock gained ~1.8% and rose to $55.8 during the day.

DAP (diammonium phosphate) prices have been rising in 2018 and made new highs in recent weeks. Last week, DAP prices appeared to pause.

In the week ending September 28, the EIA (U.S. Energy Information Administration) reported that the natural gas prices in the United States were mixed.

The 13F filings of June 30 indicate that institutional investors own ~67.1% of Deere’s (DE) outstanding shares.

Last week, the MAP prices in the NOLA (New Orleans) region rose by as much as 47 basis points week-over-week to $432 per metric ton.

The week ending September 21 was broadly positive for the fertilizer sector. MOO rose 2.3% from the week ending September 14.

MAP (monoammonium phosphate) prices last week continued their ascent.

Urea, the most common nitrogen fertilizer, has been on an upward trend in recent weeks.

Last week, which ended September 7, the VanEck Vectors Agribusiness ETF (MOO) fell 1.8%, while the S&P 500 Index fell 1%.

Last week, the overall fertilizer sector was broadly positive with six of the six stocks ending in flat to positive territory.

Nutrien (NTR) has a consensus recommendation of “buy.”

The median forward EV-to-EBITDA multiple of the four fertilizer companies stood at 9.7x as of August 27.

Mosaic (MOS) is expected to see its gross margins expand to 21% in fiscal 2019 from 13% in fiscal 2018.

MAP (monoammonium phosphate) prices last week rose to a new high, confirming a strong momentum for fertilizer stocks.

Last week was broadly positive for the fertilizer sector, with the VanEck Vectors Agribusiness ETF (MOO) ending 1.3% higher.

CF Industries reported sales growth of 16% year-over-year in the second quarter due to the increase in realized fertilizer prices across its five segments.

The fertilizer sector remained under pressure between August 3 and August 13, with the benchmark VanEck Vectors Agribusiness ETF (MOO) declining 2.4%

As of August 14, Deere’s forward PE multiple was at 12.5x, while Caterpillar’s PE multiple was at 11.0x. Deere is trading at a premium compared to Caterpillar.

Mosaic (MOS), which is one of the major phosphate fertilizer producers, provided some insights into the phosphate market during its earnings call.

Nutrien (NTR) reported its second-quarter earnings on August 1 after the market closed.

CF Industries reported second-quarter sales of $1.3 billion, which beat analysts’ estimate of $1.2 billion.

CVR Partners missed both top-line and bottom-line estimates for the second quarter, and the stock fell 4.5% after the earnings release.

Intrepid Potash (IPI) is set to release its second quarter 2018 earnings on August 1. Analysts are estimating EPS of $0.04.

Today, RBC upgraded CF Industries (CF) from its “underperform” rating to “sector perform.”

Agrible’s technology gives a digital dimension to farming activity by driving efficiency in decision-making.

On July 16, Nutrien (NTR) announced that it has entered into an agreement to acquire Agrible for a value of $63 million.

Last week, MAP (monoammonium phosphate) prices in Brazil continued their uptrend, while prices in NOLA (New Orleans) moved sideways.

Last week, which ended July 13, was broadly negative for the agribusiness sector. The broader market index was positive.

China is one of the largest fertilizer consumers in the world. Investors are concerned that retaliatory measures might hurt fertilizer companies.

Like DAP (diammonium phosphate) prices, MAP (monoammonium phosphate) prices were mixed last week.

In this series, we’ll look at key NPK (nitrogen, phosphorous, and potassium) fertilizer prices last week.

The upward trend for fertilizer continued last week, with CVR Partners (UAN) rising 9.6% week-over-week to $3.30.

Last week, potash prices were also broadly positive and managed to make new highs so far year-to-date.

Last week, the major NPK (nitrogen, phosphorous, and potassium) fertilizer prices rose broadly week-over-week.

On June 25, the stock market continued to bleed due to risks from the escalating trade. The S&P 500 Index (SPY) fell almost 1.3%.

So far, June has been positive for most fertilizer stocks, buoyed by expectations of an improvement in commodity prices.

CF Industries (CF), one of the major nitrogen producers in North America, has had a bumpy ride since 2015.

We were fully invested in April. This was the right call as real asset investments rallied. RAAX begins to raise a cash position when five or more assets become bearish.

The aphorism “a rising tide lifts all boats” is appropriate here. April was a great month to invest in real assets.

RAAX remains fully invested across commodities, natural resource equities, and MLPs. As they were at launch, the largest weightings remain in diversified commodities (30%), gold bullion (20%), and agribusiness equities (20%).

The VanEck Vectors Real Asset Allocation ETF (RAAX) launched, on April 9, into a period of strong performance for real assets.

Natural gas prices are critical for nitrogen and ammonia-based phosphate fertilizer producers.

On May 17, Cowen and Company raised its price target for Mosaic (MOS) to $35 per share from its previous target of $32.

Intrepid Potash (IPI) reported its earnings on April 24 before the market opened.

Last week, DAP (diammonium phosphate) prices were broadly flat to positive WoW (week-over-week) and much higher YoY (year-over-year).

Nutrien (NTR)(POT)(AGU) reported its 1Q18 earnings on May 7 after the market closed.

The Mosaic Company (MOS) announced its 1Q18 earnings after the market closed on May 7. It posted adjusted EPS (earnings per share) of $0.11.

Mosaic is expected to report EPS of $0.28 in 1Q18, which would be a significant rise from its EPS of $0.04 in 1Q17.

CF Industries (CF) reported its 1Q18 earnings on May 2, after the market closed.

While nitrogen and phosphate prices at some locations experienced a weekly increase, potash prices were broadly flat to negative week-over-week.

As of May 1, Israel Chemicals and Mosaic were the only two fertilizer stocks to have positive YTD (year-to-date) returns.

For 1Q18, CF Industries’ EBITDA (earnings before interest, tax, depreciation, and amortization) are estimated to grow year-over-year by 22% to $333 million from $272 million a year ago.

Fertilizer stocks have failed to impress investors in 2018. The VanEck Vectors Agribusiness ETF (MOO) has returned ~1.4% year-to-date.

In the week that ended on April 13, 2018, the Fertilizer Affordability Index drifted lower, continuing its two-week streak.

Last week, MAP (monoammonium phosphate) prices mimicked the movements in DAP (diammonium phosphate) prices.

Natural gas prices, which are key to US nitrogen fertilizer producers (MOO), were broadly lower during the week of April 4 to April 11, 2018.

The Fertilizer Affordability Index issued by the Mosaic Company (MOS) showed that fertilizers continued to be more affordable last week.

Last week, urea prices in the NOLA (New Orleans) region of the US declined by ~3.4% week-over-week to $207 per metric ton from $214 per metric ton.

Monsanto (MON) stock surged on April 9, 2018, following news that the U.S. Department of Justice approved the merger with Bayer.

In the week ending March 30, 2018, potash prices were broadly flat to positive. Last week, the prices were also strong YoY (year-over-year).

In the week ending March 30, 2018, MAP prices in Brazil remained flat week-over-week at $426 per metric ton from a week ago.

CF Industries emerged as the biggest gainer last week and rose as much as 1.0% to $37.7. Most fertilizer stocks continue to deliver losses YTD.

Based on the latest short interest report on March 1, 2018, Deere’s (DE) short interest has fallen since the beginning of 2018.

The Bayer-Monsanto (MON) deal is still under review for antitrust issues in the US due to concerns that the two companies combined could harm the competitive environment.

Fertilizer affordability tracks how the prices of key NPK fertilizers moved in comparison with the key fertilizer-consuming crops such as corn, soybean, and wheat.

Last week, MAP prices in both Brazil and NOLA (New Orleans) fell week-over-week.

In the week ended March 16, the VanEck Vectors Agribusiness ETF (MOO) fell ~2%.

The current consensus mean rating on FMC stands at 2.18 with an overall “buy” recommendation on the stock.

The current consensus mean rating on SQM stands at 2.42 with an overall “buy” recommendation on the stock. The rating rose from 2.3 last month.

CF Industries reported its earnings on February 14. Before its earnings, CF Industries was trading at $39.7. CF Industries stock soared to $44.7 on March 5.

Overall shipments in 4Q17 for five companies fell ~13% year-over-year.

Phosphate fertilizers have been weaker year-over-year compared to potash and nitrogen fertilizer prices.

In the recent quarters, fertilizer companies (MOO) have rationalized their output and costs to sustain the downward momentum in fertilizer prices that seemed to keep going down.

In 4Q17, the overall nitrogen shipments of the five companies discussed below moved lower year-over-year.

With the 4Q17 earnings season behind us, it’s time to take a closer look at how fertilizer companies (MOO) performed in the recent quarter.

In the week ended February 23, the Fertilizer Affordability Index rose to 0.71x from 0.7x a week ago.

Last week, phosphate prices for both DAP (diammonium phosphate) and MAP (monoammonium phosphate) continued their upward momentum.

Urea prices for the standard grade in the NOLA (New Orleans) region of the US and in Egypt saw the steepest weekly change last week.

So far this year, some major agribusiness stocks, particularly in the fertilizer sector, have performed poorly.

In fiscal 1Q18, Deere & Company (DE) reported total revenue of $6.9 billion inclusive of financial services and other revenue.